Tips on Adjusting Your Marketing Budget

Fall and winter are often categorized as the down season for construction and home improvement industries. In order to prepare for this upcoming season, you need to adjust your marketing budget.

Part of the adjusting process is looking at historical information from the year prior, if you have it, and to understand how much your job activities decrease by as well as how much will your operating expenses will decrease by, if at all? Operating costs are defined as all marketing costs as well as transportation, depreciation, insurance, training and the unexpected expenses.

There are a few ways to go about managing your marketing budget. To find a method that works best for you, ask yourself these questions. 

• What percentage of sales or revenue can you allocate to your budget? 1-10% of sales is recommended depending on how well established your business s is, if no one has heard of you yet, spend more.  Start allocating revenue from current jobs now, before things slow down, so you can have your name out there and business lined up by the time the ground has thawed.
• How much does your competition spend? This will help you gauge a ballpark figure for your company.
• Do you know your ROI? Do you know the impact of your advertising campaigns and other marketing efforts on your bottom line?  Do you know which channel of advertising is working? It’s important to be as granular as possible and always measure your return on your investments. As you pull back on your budget for the down months, keep the channels that perform well with the most budget, and cut those channels that are not producing results.
• What else can you spare? What percentage of revenue can you put back into marketing after you have taken care of all other expenses?

Now you know where your budget is going to come from but you may be unclear about where to allocate it. This is the challenge all marketers and small business owners face.  The first question to ask yourself is who are your customers? Where are they? How can you find them? The answer to these questions will help you determine way to allocate your precious resources.

No matter where you choice to test and put your resources, you need to be able to track and measure everything! If you end up spending in traditional marketing channels, one way to track is to ask every referral how they found you. Put this question on your “Contact us” page on your website as well.  You might be surprised what you discover.  Next, do the math.  How much did you spend in that channel to get the new client? How many jobs did you complete for them? Did they refer you to anyone else? This will allows you to find your profitable channels but also discovering the true value of your clients.

Here are a few budget friendly advertising channel ideas. 

• When it comes to print, many small businesses use newsweeklies. Another idea is to buy remaining ad space in magazines or newspapers right before they go to print – they will be trying to sell the space at a much lower price. Another way to get a discount would be to sign a long term contract.
• Radio is a great marketing channel to find creative arrangements. I use to secure radio spots by giving away tickets to the event I was promoting in exchange for ad spots. Another idea is to let the radio DJ promote your service which can result in free bonus spots.
• Online advertising is very cost efficient. You can be very targeted and measure your results immediately. From pay-per-click to banner display, you can track the impressions, clicks and conversions (people that land on your website and complete your contact form).

One common metaphor for your marketing budget is to think of it like a race car. Mechanics are always tweaking and adjusting the car’s performance to get it just right.

This post was written by Mary at ConstructionDeal.com

2 Responses to “Tips on Adjusting Your Marketing Budget”

Author comments are in a darker gray color for you to easily identify the posts author in the comments

1. Josh Clement says:

   January 20, 2011 at 1:51 am

   Great information! Construction Deal is a great tool for contractors too!
2. Justin H. says:

   January 20, 2011 at 3:03 am

   Marketing can definitely add up. If you don’t plan then you can definitely find yourself in a hole. Great tips!